Major Saudi industrial clients are moving forward with large housing projects in the kingdom, with Maaden and Sabic inviting bids for almost 2,000 villas in September.

Maaden has invited contractors to submit bids for a scheme to build 1,000 villas on 15 September, and Sabic has invited submissions for a contract to build 700 villas.

For the Maaden contract, the work will involve building the 1,000 villas at its Wadi Shamal industrial city development, for which the US’ Bechtel is the project manager. In addition to the villa contract, the client will also be tendering a roads package. The 700-villa package tendered by Sabic forms the first phase of its plans to build 1,200 villas in Riyadh for its staff. The consultant for the housing scheme is Canada’s Stantec.

The tenders have pleased large-scale contractors, who had been left disappointed earlier in the year when the Housing Minister cancelled contracts for which it had tendered and awarded for thousands of villas, which had formed part of its proposed $70bn housing programme.

“We are pleased that there are some decent sized housing projects coming through from major clients, after the Housing Ministry cancelled their packages,” says a source at a major local contracting firm in the kingdom.

MEED reported in May that the Housing Ministry had decided to turn to the private sector to deliver the first phases of its major housing programme, which is scheduled to build 500,000 new homes for local citizens. The ministry has taken the decision to hand over land to private developers and individuals to build the homes, and is now planning to merely tender land improvement and basic infrastructure packages.

The cancelled construction contracts included the project to build 7,000 villas in Riyadh, for which contractors had submitted bids in November last year. It was the largest housing package that had been tendered by the ministry since its creation.

The Housing Ministry appointed the US’ Parsons in November 2011 to provide masterplanning, infrastructure design and the design of various housing types for the first phase. The firm was also set to provide construction supervision on all 11 developments. The first phase was scheduled to cover a total area of 32 million square metres divided into 11 sites spread across the kingdom.

Little progress with the programme has been achieved since the appointment of the US firm, and the cancellation of the first major packages appears to have contributed to the shift in Riyadh’s strategy to tackle the housing crisis.

According to the Housing Ministry’s website, it is currently overseeing the development of 27,850 housing units under construction throughout the kingdom, most of which were started before it was created in 2011. It is estimated that Saudi Arabia needs to build 1.1 million new homes by 2015 to meet the housing requirements of its rapidly expanding population, which is currently growing by more than 2 per cent a year. About 60 per cent of Saudi Arabians are estimated to live in rented accommodation, rather than properties they own.